what to do with $100K that's currently in savings account

**bjl584** · 05-01-2015, 11:15 AM

Sounds like you need to fix your marriage before you worry about your finances. All of your planning assumes that you're going to get a divorce. That is a huge red flag.

As far as what to do with your money, you'll need to get part of it out of cash and start investing it. Don't worry about market crashes. Markets peek and crash. You should have a 20 year or more time horizon though. Don't look day to day or month to month.

**Drake3287** · 05-01-2015, 11:23 AM

I second that answer, not only are you maybe thinking about a future divorce but also maybe having a baby with this guy. You need a marriage forum not a financial one!

As for the stock market, of course it'll crash at some point. And after that it'll go right back up. You have to look at the long term investment over 30 years or so. I and many of the others around here have weathered all the stock market ups and downs for the last 20 or 30 years and have all survived, many of us financial better off because of it.

**disneysteve** · 05-01-2015, 06:07 PM

Originally posted by retireby55 View Post

I'm 40 years old

I only have $250K in my retirement account
I have $50K sitting in a tax-exempted mutual fund.
I have $100 in my combined non-retirement brokerage accounts

I want to have 1 million by age 55.

I agree that you need to get the marriage/divorce issue settled first, but this is a financial forum so let's focus on the money.

You say you want to have $1 million by age 55. You're already there. You have $450,000 now. If that earns 6%/year for the next 15 years, that will put you right around $1 million.

The real question is will $1 million be enough in 15 years to allow you to semi-retire? That will generate income of about $40,000/year. Will that cover your expenses, along with your part-time income? I don't know the answer to that as it all depends on your lifestyle at the time.

The good news is that you are actually going to have way more than $1 million in 15 years because you are continuing to save and invest, not just depend on what you already have saved.

What percentage of your income are you currently investing?

As for the 100K, certainly that's too much to have sitting in cash. Keep 6 months worth of expenses as an emergency fund and start investing the rest. Don't do it all at once. Dollar cost average, meaning you invest a set amount every month until you've gotten it all invested. That buffers the effect of any market correction that might happen.

**HappySaver** · 05-01-2015, 07:17 PM

Pay off the students loans. The loan rate, while low, is still higher than what you're collecting in interest. And 13 years is long enough to hold onto student loans.

Then you'll "only" have 50k to worry about how to invest.

Also, I have a friend who was divorced immediately after her husband paid off his student loans. She was pretty bitter that he used their money to pay off the loans, and then immediately walked away with no debt.

If you have personal money, it seems fair that you should use that, instead of joint money, for your personal debt.

**snafu** · 05-02-2015, 09:28 AM

Welcome to SA. Adding to previous comments... Good on you for being in the tiny minority who understands the need for savings and planning for retirement. There are likely 35 years without monthly earned income in your future that needs to be funded.

I hope you understand that inflation is currently around 4% and food costs are increasing. Your savings are losing buying power, not good looking out 15 years to 2030.. I suggest that you look on line at Vanguard or similar site and complete their questionnaire to determine your Risk Tolerance. You need to be able to sleep at night without worrying if your investment portfolio is moving down.

Both the Bond and Stock markets rollercoaster up and down, reversed from each other. You need to to know what your current retirement plan charges you in fees like Management Expense Ratio [MER] or whatever they choose to call it. It's money silently lost. You need to know what is in the existing portfolio so that new money meshes and compliments. I wonder if you'd be willing to read a couple of books like The Millionaire Next Door or The Automatic Millionaire to better understand the process and planning for investment.

Perhaps look at you current and expectation of future earned income. Would it be in your best interest to open a ROTH type account as well if you meet eligibility requirements.

How long have you and DH been married?

**My English Castle** · 05-02-2015, 07:07 PM

What are your longer-term plans?

**tripods68** · 05-03-2015, 04:44 PM

Originally posted by retireby55 View Post

I have a mortgage, but that house was bought with my husband, so I don't want to use my own money (money I saved up before the marriage) to pay off the mortgage because if there's a divorce, he'll get half of the house (just planning for the unforeseen future). He has a kid from a previous marriage, and I don't have kids of own (yet). I want to plan for MY future, in case I have to live the rest of my life alone.

I think you're already n divorce mode by your comments. But i agree with advice here...both of you need marriage counseling if one foot is already out the door.

First thing you should do with $100K is pay off your Student Loan 100% and car loan $8K. That gives you $40K in Savings that you should set aside for EF if not adding towards your retirement. You should seat down with your husband to pay off mortgage together. Think about it, Marriage life without a mortgage....imagine that!

**feh** · 05-04-2015, 06:07 AM

If you have questions about personal finance, click on the link in my signature. If you want to learn about investing, read this page: http://www.bogleheads.org/wiki/Bogle...g_start-up_kit

First think you need to do is stop worrying about a market crash. You can't time the stock market.

**Singuy** · 05-04-2015, 11:21 AM

I really don't understand why so many people here thinks the op is thinking about getting a divorce?

You do realise the average rate of divorce is 50%+ right?..and then you add the complications of children that are not yours, the rate may only go up and not down. The OP is just assesting her risks here. Putting her money into the mortgage is too risky when compared to the interest rate saved.

**disneysteve** · 05-04-2015, 11:32 AM

Originally posted by Singuy View Post

I really don't understand why so many people here thinks the op is thinking about getting a divorce?

OP is married, but mentioned preparing for divorce a couple of times. She and her husband are not working together toward common goals. She is intentionally planning her finances to protect herself after divorce.

If you hear me talk about "our" finances (not "my" finances, you will never hear me say anything about divorce or protecting myself or what my wife would get if we split up. That isn't how a stable marriage operates.

**retireby55** · 05-05-2015, 09:29 AM

Upate:

Thank you for all your responses. I think I will take the majority of your advice and put at least 50% in the market.

BTW, my marriage is great and we're not getting a divorce. We've been married for 2 years and we are very happy together. After we got married, we put all our married income in a joint account, bought a house together, and we are saving for our future. Whatever money we have in our joint account, we sit down and decide together what we want to invest in. Sorry, I shouldn't have mentioned the word "divorce" in my initial post. I'm a loner, always had to support myself and take care of myself, so I always plan ahead. I will always look at the worst case scenario and make plans to reduce the risk or loss.

The divorce rate in America for first marriage, vs second or third marriage: 50% percent of first marriages, 67% of second and 74% of third marriages end in divorce.

Everyone I know is getting a divorce or is already divorced, so I don't understand why some of you think I'm having a marriage issues just because I want to plan for the unforeseen future. It's just like couples getting a prenup before they get married, that doesn't mean they are not happy or they're planning to get a divorce. Before I got married, I read lots of articles recommending (at least for people who married late in life) to keep their pre-marital assets separate from post-marital asset. He also keeps his pre-marital assets separate. We both made the decision to keep those separate.

The $100K is my personal savings, I just want to protect it. Maybe that's not much to some people, but I work very hard to save it and made lots of sacrifices. I don't eat out (I LOVE to eat good food), I don't shop much (women love shopping, but I held back), I don't buy new or expensive cars, and I moved to the boonies to work for 4 years all by myself so I can make more (it was extremely lonely and boring there). It's a sacrifice I'm willing to make to achieve my goal, so I don't want to take any chance of having to split that IF there is a divorce. Is that so wrong? :-(

**Thrif-t** · 05-05-2015, 12:49 PM

No retireby55 you are not wrong and have every right to keep your pre-marriage money separate! No one knows what may happen and you should always protect yourself. I got a little inheritance from my parents and did the same thing, kept in an account in my name only. It's my little security blanket. Not that I don't use it sometimes for things for my DH and kids, cause I do but still its mine should I ever need it for myself. We're going on 25 years of marriage, I have no doubt it'll be till death do us part, but this is my little insurance policy.

**Nutria** · 05-05-2015, 03:41 PM

Originally posted by retireby55 View Post

I have $100k in my savings account. I don't know what to do with it because I read that the stock market might crash this year or next year

Rule #1 of investing: just because someone puts on a suit -- or puts up a web site with a fancy sounding name -- and says they're a financial expert, that doesn't mean that they are.

Even counting the 2008 crash, fear and ignorance have caused you to not earn a whole heap of money in the last 15 years.

C'est la vie...

**Nutria** · 05-05-2015, 03:54 PM

Originally posted by Singuy View Post

You do realise the average rate of divorce is 50%+ right?

Some people marrying 3, 4, 5 times really skews the average.

what to do with $100K that's currently in savings account